Akums Drugs and Pharmaceuticals Limited IPO

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They are a premier pharmaceutical contract development and manufacturing organization (CDMO) offering a comprehensive array of pharmaceutical products and services both in India and overseas. They are renowned for owning the intellectual property for several of their manufacturing processes and for their end-to-end product development and manufacturing solutions. Their services extend to formulation research and development (R&D), preparation and filing of regulatory dossiers in Indian and global markets, and various testing services. Additionally, they are involved in the manufacturing and sale of branded pharmaceutical formulations and active pharmaceutical ingredients (APIs).

Market Leadership

They are recognized as the largest India-focused CDMO based on revenue, production capacity, and the number of clients served in the Financial Year 2023 . Their extensive range of dosage forms includes tablets, capsules, liquid orals, vials, ampoules, blow-filled seals, topical preparations, eye drops, dry powder injections, and gummies. Their market share in the Indian domestic CDMO market by value was 30.2% during the Financial Year 2024, up from 26.7% in the Financial Year 2021. The Indian domestic CDMO market is expected to grow at a CAGR of 14.3% from Financial Year 2024 to Financial Year 2028, reaching a market size of USD 2.8 billion by Financial Year 2028 (Source: F&S Report).

Client Relationships

Their longstanding relationships with their clients are built on consistency and trust. As of March 31, 2024, key clients for their CDMO business include prominent pharmaceutical companies such as Alembic Pharmaceuticals, Alkem Laboratories, Blue Cross Laboratories, Cipla, Dabur India, Dr. Reddy’s Laboratories, Hetero Healthcare, Ipca Laboratories, Mankind Pharma, MedPlus Health Services, Micro Labs, Mylan Pharmaceuticals, Natco Pharma, Sun Pharmaceutical Industries, UCB, and Amishi Consumer Technologies (The Mom’s Co). They have received repeat orders from 38 of our 50 largest clients in terms of revenue over the past five years, reflecting the quality and reliability of their products and services. Additionally, 26 of their 50 largest clients have been with them for over ten years, with their revenue contribution growing from ₹13,548.50 million in Financial Year 2022 to ₹14,415.38 million in Financial Year 2024.

Strategic Focus

Their business model is designed to strengthen their product portfolio through continuous investment in R&D, marketing activities, and the establishment of long-term relationships with their clients. They aim to maintain their market leadership by leveraging their expertise in pharmaceutical manufacturing and development, ensuring high-quality standards, and delivering cost-efficient solutions to meet the evolving needs of their clients.

Conclusion

With a strong foundation in pharmaceutical manufacturing and development, their company continues to lead the CDMO market in India. Their commitment to quality, innovation, and client satisfaction has positioned them as a trusted partner for pharmaceutical companies worldwide. They look forward to sustaining their growth and expanding their market presence through strategic initiatives and continued excellence in their services.

Objects of the Akums Drugs and Pharmaceuticals Limited IPO:

The Company proposes to utilize the Net Proceeds towards the funding of the following objects: i. Repayment/ prepayment of indebtedness of the company and its Subsidiaries; ii. Funding incremental working capital requirements of the company; iii. Pursuing inorganic growth initiatives through acquisitions; and iv. General corporate purposes. Total number of share issue :- i. Fresh issue is 10,014,727 shares, ii. Offer for sale is 17,330,435 shares.
DRHP of Akums Drugs and Pharmaceuticals Limited IPO
RHP of Akums Drugs and Pharmaceuticals Limited IPO

Akums Drugs and Pharmaceuticals Limited IPO Details:

Open Date: Jul 30 2024
Close Date: Aug 01 2024
Total Shares: 27,345,162
Face Value: ₹ 2 Per Equity Share
Issue Size: 1,856.74 Cr.
Lot Size: 22 Shares
Issue Price: ₹ 646 - 679 Per Equity Share
Listing At: NSE,BSE
Listing Date: Aug 06 2024

Promoters And Management:

Sanjeev Jain is the Managing Director of the Company. He has completed his matriculation from Central Board of Secondary Examination, in 1981. He has been associated with the Company as a co-founder, promoter and a director since April 19, 2004. He has over 38 years of experience in Indian pharma industry and managing end to end aspects of CDMO business. Prior to the incorporation of the Company, Mr. Sanjeev Jain was associated with M/s Welcure Pharmaceuticals as partner and with Welcure Pharmaceuticals Private Limited as a director and shareholder since September 1984. Sandeep Jain is the Managing Director of the Company. He holds a bachelor’s degree in commerce (pass) from University of Delhi. He has been associated with the Company as a co-founder, promoter and a director since April 19, 2004. He has over 36 years of experience in establishing and running large scale pharma manufacturing facilities. Presently, he is the Chairman of Association of Devbhumi Pharma Industries and Past Chairman of Confederation of Indian Industry’s state council, Uttarakhand. Prior to the incorporation of the Company, Mr. Sandeep Jain was associated with Welcure Pharmaceuticals Private Limited as a director and shareholder since August 1986. Sanjay Sinha is a Whole Time Director and President, Operations of the Company. He holds a bachelor’s degree in pharmaceutical sciences from Ranchi University and a master’s degree in pharmacy from the University of Delhi. He was previously associated with Ipca Laboratories Limited as the President, Operations (Formulations). He has also served as the President, Operations at the Ahmedabad Plant of Famy Care Limited. He joined the Company with effect from November 26, 2022.

Financials of Akums Drugs and Pharmaceuticals Limited IPO:

Particulars ( In Crores )
2022
2023
2024
Revenue from Operations 3,672 3,655 4,178
Other Income 23 46 34
Total Revenue 3,695 3,701 4,212
Cost of Material Consumed 2,039 2,028 2,278
Purchases of stock-in-trade 394 222 260
Changes in inventories -88 24 12
Employees Benefit Expenses 508 590 647
Fair value changes to financial instruments 494 -44 358
Other Expenses 417 497 500
EBITDA -69 384 157
OPM (%) -1.87% 10.38% 3.73%
Depreciation & Amortisation 95 113 126
EBIT -164 271 31
Finance Cost 17 46 51
PBT -193 150 -45
Tax 58 52 -46
PAT -251 98 1
NPM (%) -6.79% 2.64% 0.02%
No.of Shares 15.73 15.73 15.73
EPS -15.94 6.21 0.05

Comparison With Peers:

Name of the Company Revenue (In Crore) PAT (In Crore) EPS ( in Rs) P/E CMP Mcap (In Crore)
Akums Drugs and Pharmaceuticals 4,178 1 0.05 13,525.9 679 10,685
Divi's Laboratories 7,845 1,600 60.27 81.4 4,912 1,30,423
Suven Pharmaceuticals 1,051 300 11.80 90.0 944 24,043
Gland Pharma 5,665 772 46.90 43.9 2,060 33,931
Torrent Pharmaceuticals 10,728 1,656 48.94 63.0 3,111 1,05,345
Alkem Laboratories 12,668 1,811 150.19 33.0 5,226 62,485
Eris Lifesciences 2,009 397 28.82 39.1 1,126 15,314
J B Chemicals & Pharmaceuticals 3,484 553 35.61 55.8 1,943 30,164
Mankind Pharma 9,265 1,823 45.52 48.0 2,056 82,371
Innova Captab 1,081 94 16.49 38.4 632 3,621
* All the data is as per FY24.

Recommendation on Akums Drugs and Pharmaceuticals Limited IPO:

About the Company: Akums Drugs & Pharmaceuticals Ltd. is a leading contract development and manufacturing organization (CDMO) established in 2004. The company offers a comprehensive range of pharmaceutical products and services in India and overseas. As a prominent CDMO in India, Akums owns the intellectual property for manufacturing processes of several formulations, focusing on end-to-end product development and manufacturing solutions. Business Model: The core business model of Akums revolves around providing CDMO services, which include formulation research and development (R&D), preparation and filing of regulatory dossiers, and other testing services. Additionally, Akums is involved in the manufacturing and sale of branded pharmaceutical formulations and active pharmaceutical ingredients (APIs). Products and Services: (i) CDMO Services: End-to-end product development, manufacturing of various dosage forms including tablets, capsules, liquid orals, vials, ampoules, topical preparations, eye drops, dry powder injections, and gummies. (ii) Branded Formulations: Manufacturing and marketing of branded pharmaceutical products in various therapeutic areas such as gynecology, cardiology, orthopedics, and pediatrics. (iii) APIs: Development and sale of APIs across therapeutic areas like anti-infectives, respiratory, and diabetes. Presence and Reach: Akums has a strong domestic and international presence. In India, the company operates through its subsidiaries, Akumentis and Unosource, focusing on different therapeutic areas and markets. Internationally, Akums has a presence in 65 countries, serving a diverse client base including leading pharmaceutical companies and healthcare providers. Manufacturing Facilities: The company operates 10 manufacturing units with a cumulative capacity of 49.23 billion units annually as of March 31, 2024. These facilities are accredited by various global regulatory agencies like EU-GMP, WHO-GMP, and US NSF. The company is also set to operationalize a new injectable facility in FY25. Revenue and EBITDA Growth: (i) Revenue Growth: Akums demonstrated a compound annual growth rate (CAGR) of 10.79% in CDMO revenue between FY22 and FY24. (ii) EBITDA Growth: The company achieved an EBITDA growth at a CAGR of 10.28% during the same period. (iii) PAT Growth: Akums reported a significant improvement in PAT, increasing from a loss of ₹251 crore in FY22 to a profit of ₹1 crore in FY24. IPO, Market Capitalization Akums is preparing for an initial public offering (IPO) for the repayment or prepayment of certain borrowings. This includes ₹1,599.10 crore for the company's debt and additional amounts for its subsidiaries, Maxcure Nutravedics Limited and Pure and Cure Healthcare Private Limited and to enhance its market presence and financial strength. As of now, the market capitalization is Rs. 10,685 and the company's financial performance indicates a strong valuation in the pharmaceutical market.

Lead Manager of Akums Drugs and Pharmaceuticals Limited IPO:

  1. Ambit Capital Private Limited
  2. Axis Bank Limited
  3. Citigroup Global Markets India Private Limited
  4. ICICI Securities Limited

Registrar of Akums Drugs and Pharmaceuticals Limited IPO:

  1. Link Intime India Private Limited

Company Address:

Akums Drugs and Pharmaceuticals Limited 304, Mohan Place, LSC Saraswati Vihar, Delhi - 110 034 Phone: +91 11 6904 1000 Email: cs@akums.net Website: http://www.akums.in/

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